Economics/6.Marketing and management
PhD Кranuchenko О.F., Kochmaruck M.V., Vasilko T.D.
National university of food technology
VALIDITY OF THE CHOICE OF INTERNATIONAL MARKETS AS THE KEY TO SUCCESSFUL FOREIGN ECONOMIC ACTIVITY OF
ENTERPRISE
The
basic principles and methods of realization of international marketing are fundamental for foreign
economic activity of enterprise, forming its strategy and
tactics while choosing output and operation in foreign
markets. At the stage of making decisions on access to foreign
markets the main task is to substantiate the suitability of this step for
enterprise. According to the authors, the success of solving this problem is
conditioned by three main factors.
These
factors are firstly availability and sufficiency of company’s externally
economic potential, secondly selection and evaluation
of
the attractiveness of foreign markets, and thirdly external economic potential matching with market conditions and characteristics for which this potential is estimated.
In
international marketing activity it is important to have correct valuation
of
international marketing activities’ potential of the company, which is possible only on the basis of applying
scientifically and methodically reasonable approach which is based on the main stages such as identification of the type of
activities, for which the potential is estimated; identification of composition and priority for key elements of external economic potential
and also assessment of the availability and sufficiency of potential firms in a certain market.
In accordance with
strategies
of entering the foreign market it’s
possible to single out three main types of
international activities and the its corresponding
types of (potential of
international activities): export potential, the
potential of international cooperation, the potential investment. Export
potential reflects the
maximum capacity
of the enterprise for
a given level of
technical and technological base
to produce competitive
products on the
national territory and sell
it on the world
market. Potential international cooperation characterizes
the maximum capacity of the firm for a given level of development of internal
resources of the firm to transfer to overseas markets competitive technologies,
know-how, licenses, services in collaboration on a contract or contract and
investment basis
with foreign partners. Investment
potential determines
the maximum capacity
of the firm for
a given level of
internal resources to
expand its international
activities through
investments in
joint ventures, own
units in overseas markets.
Outstanding role in forming the the capacity of
international activities play a certain internal resources of the firm, called
key components of external economic potential. They include staff (their number,
qualifications, focus on
success), finance (structure of own capital, increase own
capital by capitalized profits, access to cheap
loans), technical and technological base (quantitative and qualitative
composition of equipment, machines, tools, period of their operation,
performance, progressive technologies,
know-how about a unique product or
technology; product quality), methods of management (company image, marketing communications,
logistic, experience in marketing). The most common method of assessing
external
economic potential company for its constituent elements is the
method of expert estimates.
In order to
evaluate and compare the overseas markets the most widely used method is the
method of ranking which provides regulation of foreign markets according to
their relevance for specific goods and services. The characteristics which are taken as a basis for ranking, depend on
the type of product or service, and also on the specific situation in foreign
markets.
In this
project for determining the attractiveness of foreign markets not only the
options of market are used, but also the characteristics of the international
marketing environment of a host country
and the main strategic marketing variables.
The main market
parameters which are taken into account when assessing are: the capacity and
level of monopolization of the market, its growth rate, the market perspectives for the next 10 years. Characteristics of international
marketing environment of the prospective international markets include
economic, political, legal and sociocultural indices of a host country.
Strategic marketing variables
correspond to the basic elements of the
marketing mix: product (degree of demand to product, reliability, ecological
compatibility, attitude of consumers to the product, the frequency
of purchases, seasonal prevalence of sales, corresponding packaging
requirements of customers, required
size of market research in order to
adapt the product to market), price
(price level for goods of companies), distribution system (flexible system of discounts in the main
competitors, attitudes to products of resellers), communication system (level
of promotion and informational support of major competitors).
The procedure of
comparing external economic potential
with conditions and characteristics of the foreign market offer to use a
special matrix for making decisions
about entering to a foreign market, which is based on two factors: assessment
of market attractiveness and level of
readiness of the enterprise to foreign economic activity. The field of this
matrix vertically forms a factor of market attractiveness, and horizontally -
readiness for foreign economic activity. The manifestation of each of these two
factors are estimated as very high, high, moderate and low. In this regard, the
field of matrix is divided into sixteen squares by lines which pas respectively
through the numbers 2; 2.75; 3.5; 4.25
and 5, on condition that manifestation of selected indicators and parameters are estimated from
"2" to "5". The situation of the enterprise of
international marketing activity is determined on the field of matrix by
crossing lines which correspond to generalizing evaluation of the
attractiveness factors and readiness to foreign economy activity. The international
marketing strategy is formed for each position of the company.